THE Basin Plan has done its job to date but the immediate future holds significant concerns. And most of all, the states need a kick in the backside to get them going.

That’s the message from the Productivity Commission's report on the $13 billion Murray Darling Basin Plan which follows a five year assessment.

“There has been important progress and unfortunately that message can get lost in controversy,” said PC water commissioner Jane Doolan.

Water recovery has progressed, the more than 750 environmental watering events were effective, Basin Plan trading rules are working, as are regulations to balance interstate and Commonwealth requirements, the PC report said.

But despite the overall positive assessment Ms Doolan didn't pull her punches on the points of failure.

She said these risk the ultimate success of the water reform which still requires another $5 billion in taxpayer funding to complete.

The PC wants the Murray Darling Basin Authority split up to improve checks and balances - essentially it accused the MDBA of marking its own homework.

“The MDBA is an inherently conflicted entity and is perceived as such by stakeholders,” the PC said, adding that “it cannot be a trusted advisor to Basin governments and be a credible regulator”.

The PC wants a Murray Darling Basin Corporation to serve state governments with the expertise needed to implement the plan and manage the new Basin-wide water regime.

The MDBA's roles are conflicted and the conflicts will intensify in the next five years. - Productivity Commission Basin Plan report

It also wants an independent Basin Plan Regulator to restore public confidence and provide in-the-field assessments that demonstrate that the state’s offset projects are delivering the required amount of efficiencies.

“These roles are conflicted and the conflicts will intensify in the next five years,” the PC said.

The Corporation would help design offset projects and develop Water Resource Plans, and incorporate state-run environment watering plans with the Commonwealth.

Construction on the offset projects is due to start next year and completion is due in 2024. When the states stop planning and start building, the MDBA stops advising and starts regulating - that means checking on progress and measuring the project’s effectiveness.

If the projects are found to fall short of the 605GL target the Commonwealth has to re-enter the market get more water. That will likely mean more buybacks and disruption for farmers, less irrigation for Basin towns and more cost to taxpayers.

The PC found this outcome could cost $480 million.

But the Basin Plan is bigger than the Murray Darling Basin Authority.

State government are in charge of Sustainable Diversion Limit Offset Projects. That means upgrades to infrastructure or river operations to move water more efficiently.

The upshot is by moving water more efficiently, the volume needed for the environment can be reduced, which in turn minimises the size of cutbacks to irrigation entitlements.

There’s going to be 37 projects across the Basin and the PC said with scant detail available to show how they’ll work, the plans are so far behind schedule the deadline must be delayed.

“The process has lacked transparency and candour with stakeholders who are concerned about potential impacts,” the PC said.

Concerns include environmental issues such as impacts to the Lower Darling from NSW’s re-engineering scheme at Menindee Lakes, as well as an inability for the offset projects to deliver the required capacity to handle increased flow rates with damaging flooding.

The states are also in charge of the 36 Water Resource Plans, due by July next year, that divvy up water take between competing uses valley-by-valley across the Basin.

Now is the time for Basin governments to do some heavy lifting and provide strategic direction.

Again, the PC said planning is so far behind, especially in NSW which has the most valleys to manage, that the July 2019 deadline should be delayed to ensure proper planning and reduce the risk of shoddy work impacting the environment and stakeholders.

“Now is the time for Basin governments to do some heavy lifting and provide strategic direction.”

The MDBA welcomed most of the PC findings and agreed with its assessment of water recovery progress.

Chief executive Phillip Glyde said the PC’s tough talking to the states echoed what the MDBA said in its own report card, which came out last year.

But he doesn’t agree his agency should be busted up.

Mr Glyde said the agency is already an independent body and its responsibilities shift focus when the states start to implement the offset projects.

“Our role from 2012 to 2019 is to advise the states,” he said.

“Then in 2019 we flip and become the regulator and report on their progress. That was envisaged from the start.”

Mr Glyde also said the agency’s government advisory skills would be required for the regulator role to analyse offset project outcomes.

“Given the great complexity of water reform you need people with the knowledge, who understand the rules and how it all works, to be an effective regulator.

“The MDBA operations managers arm are the perfect resource to be a perfect regulator.”

Mr Glyde would prefer to stick it to the states than allow a pause in the Basin Plan.

“I don’t see the merit in pauses and delays,” he said.

“When push comes to shove the states have met their deadlines before.

“We should keep the pressure on.”

“If we keep extending there will never be the certainty the plan promised.

“And the projects are designed to improve the environment and we don't want to push that back.”